U.S. retail sales rose modestly in September, losing steam after months of strong performance

The Commerce Department on Tuesday released data on retail sales for September, delayed by the government shutdown. On an unadjusted basis for inflation, retail sales rose 0.2 percent in September, down from a 0.6 percent increase in August. Excluding cars and gasoline, retail sales rose just 0.1 percent. Eight of the 13 categories recorded gains, led by sales at gas stations, personal care stores and other miscellaneous retailers. Motor vehicle sales fell for the first time in four months. Retail sales of electronics, clothing and sporting goods also fell. Consumer momentum weakened at the end of the third quarter. While overall spending was supported by high-income consumers who benefited from a strong stock market, lower-income consumers showed signs of tightness. Rising prices and a softening job market have made many shoppers more cautious and pushed consumer confidence to near-record lows. That income gap has been a focus for Fed officials, who are sharply divided over whether to cut rates again at next month's meeting. For now, investors still think a December rate cut is more likely than not.